Spanish institute faces cash crisis

A flagship biomedical research facility in Valencia, built during the heady days of the last economic boom, is now going bust. It is a casualty of Spain’s deep spending cuts and, some say, of poor management.

The Prince Felipe Research Centre (CIPF), which hosts 260 scientists and has produced high-profile publications in regenerative medicine and biochemistry, announced an emergency financial plan on 19 October that would see about 100 research staff lose their jobs, and roughly halve salaries for those who remain. The centre was inaugurated in 2005, funded mainly by the state of Valencia, which invested millions of euros to make the CIPF a hub of biomedical research in the region.

“I though the vision was fabulous, they had international connections and they’d built that new facility,” says biochemist Billy Hudson at Vanderbilt University in Nashville, Tennessee, who has collaborated with researchers from the CIPF.

“The CIPF is one the most important centre for stem cell research in the south of Europe,” adds stem-cell researcher Ludovic Vallier of the University of Cambridge, UK. “It was a flagship for Spanish research, demonstrating its intention to modernize.”

But by 2010, the global economic downturn hit Valencia’s health ministry. It declared a retro­active 35.7% reduction to its €9.8-million (US$13.7-million) contribution to the centre’s 2009 budget. But the centre, which collects its government funding at the end of each year, had already spent its forecast budget in full, leaving it heavily in debt. Hopes for recovery were dashed when Valencia’s annual contribution fell further, to €4.6 million, in 2010 and 2011.

Economic survival

Molecular biologist Rafael Pulido, who represents the CIPF’s workers’ committee, says that the centre was particularly vulnerable to deep funding cuts because it was set up as a private foundation. That gave its workers fewer rights than public employees, and allowed the local government more flexibility to cut its funding.

The centre’s administrative board says the sackings and laboratory closures are necessary for the economic survival of the CIPF. If Valencia’s Territorial Employment and Labour Directorate approves the emergency plan, the centre will be able to pass along the cost of severance payments to Spain’s national government.

Biologist Deborah Burks, a senior scientist at the CIPF and a former member of its scientific steering committee, agrees that the economic crisis has played a part in the centre’s troubles, but she says CIPF researchers had made up for some of the funding shortfalls by bringing in €5 million–€7 million per year from outside sources, including European funding agencies. She claims that poor management has compounded the crisis.

For example, she says that new facilities costing €2 million were built at the centre without prior consultation with researchers, and they have remained unoccupied since completion in 2009. And when the centre sought a refund of €8.7 million in taxes it had paid by mistake, it paid a contractor €376,000 to handle the request, which the workers committee believes may be as much as ten times the going rate.

No headway

In 2009, Burks and other members of the scientific steering committee wrote a letter to Valencia’s health council asking them to replace the centre’s director, Rubén Moreno, a political appointee from the Partido Popular, Spain’s conservative party.

“The principal reasons [for the letter] were the lack of communication between Moreno and the investigators, and the fact that the center still does not have a strategic plan,” Burks says. “All the scientists felt very strongly that that was an important document for us to have.”

The council appointed a scientific director, but retained Moreno as the overall director. Moreno resigned his directorship last month to run for a position in the Spanish parliament; neither his political party nor the CIPF returned Nature ‘s requests for comment on his role in the centre’s financial troubles.

The new scientific director, Carlos Simón, made no headway negotiating for fewer job cuts, Burks says, and by the summer of 2011 “the writing was on the wall and nobody wanted to be responsible for firing so many people”. Consequently, the entire scientific committee stepped down in September.

Several years ago, Hudson had hosted a postdoc from the CIPF whose funding from the centre was cut off without warning. “That’s not good business,” says Hudson. “I know the impact of cutting off just one person, and I can’t imagine what it would be to cut off a hundred.”

Vallier agrees: “The waste in funding and human resources will be tremendous and will set Spanish research back 10 years.”